Archive for May, 2012

Saving Money on Summer Expenses

May 25, 2012

By Sarah Mammarella, Extension Agent, Richmond County

Summer is a great time to start saving money.  Whether it is to beef up your savings account or stow money away for a special trip event or annual holiday expenses, saving money feels good.  In order to save money we need to look at what summer expenses we can reduce.

Perhaps the most obvious place to start during the hot summer months is with our electric bill.  There are many different things that we can become more mindful about in our home that will help reduce our electric bill.  Here are a few tips that help me save money on my electric bill every month:

  • Shut off all lights and TVs in rooms that are unoccupied: This may seem like a no-brainer but this wasted energy use happens much more than you’d think.
  • Turn your thermostat up in the summer when you are not home: There is no need to cool an empty home; I normally set mine to 79°.  While you are at home, try keeping the thermostat between 76° and 78°, and using ceiling fans to keep cool. Remember to turn fans off in rooms that are unoccupied; their benefit is lost if you’re not underneath or near the fan.
  • Don’t bother turning a thermostat down from 80° to 62° with the intention of cooling your home more quickly; this will only cause your heat pump to overwork and will not bring on cooler temperatures any quicker.
  • Unplug anything that is pulling energy when you are not using it: Items such as cell phone chargers and laptops are constantly pulling energy when plugged in.  You can save a lot of money just by unplugging these items.
  • Use a power strip with an on/off switch for your television, DVD player, and other home entertainment items, and turn the switch off to the power strip when not in use: Much like the chargers, these items can still draw energy while not in use.
  • Don’t forget to unplug televisions, lamps or alarm clocks that seldom get used in guest rooms.
  • Weatherproof your home: Seal cracks around doors and windows where cool air may be escaping.  You can do this with weather stripping or in some instances, caulk.
  • Insulated drapes can help keep cold out during the winter and heat out during the summer. These can lower heating and cooling costs.
  • Make sure that you change your central air filter every month: This can help your central air run more efficiently and even increase the life of the unit.

Another summer savings opportunity is on food and convenience items.  By being mindful of how and when we shop, we can possibly save hundreds every month. Here are a few tips that help me save money on food every month:

  • Collect coupons: You can do this either by buying the Sunday paper and clipping them or going to various websites to print them off of the Internet.
  • Match your coupons to the sale items: Look through sale fliers of your most frequented grocery and drug stores and match your coupons to the sale items so you are getting the best price possible.
  • Find out when your grocery store is doing a double or triple coupon day: Most grocery stores will have specific days or weeks that they will double or triple your coupons.  This may lead to getting many items completely free.
  • Only buy sale or clearance items that you know you will use. Buying on sale is no bargain is you never use it. This can happen when buying clothes with the intention of losing weight or purchasing a kitchen gadget that you simply don’t have time to use.
  • Buy in bulk: Even if you live by yourself, you can save money by buying certain foods in bulk and freezing individual portions in freezer bags.

Although I believe that electricity and food are the easiest places to start, I do other small things to try to leave me more money in my pocket every month.  A few extra tips to save include:

  • Reduce drive time: Gas is expensive; so don’t make unnecessary trips.  Car-pooling is always a great idea.
  • Enjoy outdoor activities: Instead of paying to go enjoy your summer, try getting outside and taking advantage of free activities such as swimming, hiking and tennis. Here is a list of free or very cheap summer activities for children.
  • Get your clothes at second-hand stores: I rarely buy new clothes.  Although it may take some time, you can find used clothes that are in great shape at local Goodwill and consignment shops.

Saving money can be satisfying because it means that we are attaining goals that we have set for ourselves.  Recognizing that there is excess money being spent on such things as electric and groceries can empower us to reduce our spending by using common sense and mindfulness.

What are your favorite money-saving strategies?

Resources:

KeepingCoolrev

http://www.extension.org/pages/25638/low-cost-and-no-cost-actions-to-save-home-energy-and-money

http://www.extension.org/pages/25623/selecting-energy-efficient-home-refrigerators-and-freezers

National Financial Management Core Competencies discussed in this post: 

Saving, Protecting

What is foreclosure?

May 23, 2012

By Jayne McBurney, Johnston County Extension Agent

Changes during the economic recession, rising fuel process and job loss have all made money management difficult. For homeowners, protecting assets in the wake of economic uncertainty has been especially trying; unfortunately, some have had to face foreclosure. What exactly does that mean?

When a prospective homeowner signs on for a mortgage, it is important to be sure that the household budget will support of paying the mortgage every month with each payment on time. Missing mortgage payments is not an option for a homeowner, and doing so could cost the homeowner more than just a place to live if the bank chooses to foreclose the loan. Foreclosure proceedings take place after a number of missed monthly payments have occurred. Missing just one payment will make you delinquent, but if you do not remedy the situation quickly, the bank can take back ownership on the home, that is, they can foreclose the loan.

Homeowners should let their lender, or loan servicer, know as soon as possible when they are unable to make a mortgage payment. Lenders are currently being strongly encouraged to try to work out loan delinquency with mortgagees and there are many incentives for lenders to modify and rework loans for homeowners. Government programs, such as www.makinghomeaffordable.gov can help homeowners who have been unsuccessful working directly with their bank.

If a homeowner is unable to make mortgage payments at all, or resolve difficulties in paying their mortgage, the bank might try to encourage a “short sale,” which gets the house on the market and hopefully sold before a foreclosure takes place. It is possible for a homeowner to remain in the home while the house is on the market (or is listed for sale).

Once a foreclosure is initiated, the owner loses possession of the home as well as any equity they might have in the home. A foreclosure may seem like an immediate answer to money worries, but these former homeowners will end up with a long-lasting negative mark on their credit report, appearing for several years. Foreclosure will significantly lower the former homeowner’s FICO score also. It is very important that current and prospective homeowners make their mortgage payment an inflexible monthly obligation in their finances.

The North Carolina Housing Finance Agency offers good advice for homeowners having difficulty making a mortgage payment:

  1. Don’t ignore the problem.
    The further behind on payments you become, the more difficult it will be to reinstate your loan and the likelihood of losing your home increases.
  2. Open and respond to all mail from your lender and the North Carolina Housing Finance Agency.
    The first notices you receive will offer good information about foreclosure prevention options. Later mail may include notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.
  3. If you have requested a modification or other workout plan with your servicer, please confirm that your servicer has received all of the documentation required. If you are already in a trial modification, please verify that your servicer has received the updated income, expenses, and financial hardship information that are required to convert the trial modification into a permanent modification.
    If you are missing documents, submit them as soon as possible. Create a system to track the date documents were submitted and when calls were made to your loan servicer and other entities. Remember to write down the name of the person with whom you spoke. A calendar and lined notebook paper is all you need to create your record system. Homeowners who miss deadlines may lose their eligibility.
  4. Read your loan documents so you know what your lender may do if you can’t make your payments. If you meet with a housing counselor, bring these documents.
  5. Prioritize your spending.
    After health care, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payments. Look for optional expenses: cable TV, memberships, entertainment, etc. that you can eliminate.
  6. Use your assets.
    Do you have assets, such as a second car, jewelry, or a whole life insurance policy that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don’t significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home. It is not recommended that you use retirement savings, however.
  7. Avoid foreclosure prevention companies and foreclosure recovery scams.
    If any firm claims it can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD-approved housing counseling agency.

You also should not have to pay fees for foreclosure prevention help – use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee for services that are offered for free through HUD-approved housing counseling agencies.

Any program that requires you to pay upfront fees to help you avoid foreclosure is illegal. The Office of the N.C. Attorney General provides help identifying and combating foreclosure scams.

Foreclosures that took place between Jan. 1, 2009 and Dec. 31, 2010 may be eligible for review. The deadline to submit a request for review was April 30, 2012. For more information, click here

Resources:

http://www.ncforeclosurehelp.org/

http://www.makinghomeaffordable.gov

National Financial Management Core Competencies discussed in this post:

Borrowing, protecting, spending, earning